2015-06-25 Information Session on the OECD Guidelines for Multinational Enterprises (MNEs)

Summary

On June 25, 2015, the Department of Foreign Affairs, Trade and Development (DFATD) hosted its fourth half-day Information Session on the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises (MNEs), bringing together approximately 65 stakeholders from industry, civil society, industry associations and Government of Canada representatives.

Following opening remarks by Mr. Duane McMullen, Chair of the Canadian National Contact Point (NCP) Secretariat and Director General, Trade Commissioner Service, Operations, DFATD, there were four presentations:

  • Overview of the OECD Guidelines for Multinational Enterprises, the Canadian National Contact Point and the Request for Review Process – Presenter: Ms. Julia Cloutier, NCP Secretariat, DFATD
  • Update on the OECD Proactive Agenda on Responsible Business Conduct – Ms. Francine Noftle, NCP Secretariat and Director, International Trade Portfolio and Responsible Business Conduct, DFATD
  • CRS Initiatives National Resources Canada (NRCan)  – Presenter: Stefania Trombetti, NCP Vice Chair and Director General, Mineral, Metals and Materials Policy Branch, NRCan
  • Overview of Canada’s Enhanced CSR Strategy – Presenter: Ms. Alexandra Lamont, Deputy Director, International Trade Portfolio and Responsible Business Conduct Division, DFATD

Each presentation was followed by an in-depth discussion with the attendees.

Highlights of Presentations

Overview of the OECD Guidelines for Multinational Enterprises, the NCP and the Request for Review Process

OECD Guidelines

  • Government-endorsed framework (46 adhering countries – 35 OECD member countries and 11 non-OECD countries) of voluntary principles for responsible business conduct consistent with domestic and international laws
  • Canada is a member of OECD and a signatory to the Guidelines since inception in 1976
  • Adopted in 1976, updated 5 times, most recently in 2011
  • Guidelines provide recommendations on the conduct of Multinationals Enterprises in:
    • General Policies
    • Disclosure
    • Human Rights
    • Employment and Industrial Relations
    • Environment
    • Combating Bribery, Bribe Solicitation and Extortion
    • Consumer Interests
    • Science and Technology
    • Competition
    • Taxation

Key Additions:

  • Human Rights
  • Due Diligence
  • Supply Chains
  • Stakeholder Engagement

Role and Responsibilities of Canada’s National Contact Point (NCP)

  • Promote awareness of the Guidelines and responding to enquiries
  • Contribute to resolution of issues relating to the implementation of the Guidelines in specific instances
  • Report annually to the OECD Investment Committee

NCP Core Criteria

  • Visibility
  • Accessibility
  • Transparency and Confidentiality
  • Accountability

Specific Instance Procedures Guide

  • Request for Review
    • Phase 1: Initial Assessment
    • Phase 2: Facilitated Dialogue
    • Phase 3: Public Statement

Dialogue and Access to Services

  • Government of Canada now links participation in dialogue facilitation processes with access to trade advocacy support
  • New tool has been included in the NCP 2015 Final Statement

For more information, please visit:

Canada’s National Contact Point website: www.ncp-pcn.gc.ca

OECD Guidelines: www.mneguidelines.oecd.org

Update on the OECD Proactive Agenda on Responsible Business Conduct

OECD Proactive Agenda projects (or sector projects) contribute to awareness of the Guidelines and their implementation by identifying relevant sector work and promoting due diligence.

OECD Five-Step Framework for Supply Chain Due Diligence

  • Step 1: Establish strong management systems
  • Step 2: Identify, assess and prioritise risks in the enterprise supply chain
  • Step 3: Manage risks in the supply chain
  • Step 4: Verify supply chain due diligence
  • Step 5: Communicate and report on supply chain due diligence

Due Diligence Guidance for Meaningful Stakeholder Engagement in the Extractives Sector

In the 2011 revision of the OECD Guidelines, a new provision was added stating that MNEs should “engage with relevant stakeholders in order to provide meaningful opportunities for their views to be taken into account in relation to planning and decision making for projects or other activities that may significantly impact local communities.”

Approach:

  • Due diligence framework for managing risks with regard to stakeholder engagement activities to ensure a role in avoiding/addressing adverse impacts
  • Targets extractives companies at the site level
  • Framework to evaluate and monitor performance
  • Multi-stakeholder group chaired by Canada and Norway

Meaningful Stakeholder Engagement:

  • Ensure strong understanding of the local and operating context
  • Ensure that stakeholders and their interlocutors are appropriately identified and prioritised
  • Establish the necessary support system for meaningful stakeholder engagement
  • Design appropriate and effective stakeholder engagement activities and processes
  • Ensure follow-through
  • Monitor and evaluate stakeholder engagement activities and respond to identified shortcomings

Promoting Responsible Agricultural Supply Chains

  • Help enterprises observe existing standards of responsible business conduct along agriculture supply chains
  • A five-step framework for risk-based due diligence
  • Model enterprise policy
  • Measures for risk mitigation

Due Diligence in the Financial Sector

  • Due diligence is flexible, use risk-based approach
  • Prioritise business relationships for risk identification and management, based on severity of adverse impacts
  • Practical limitations: nature and extent of due diligence tailored to size of company and clients, context, severity of adverse impacts, etc.
  • “Leverage” is essential to prevent or mitigate adverse impacts directly linked to operations, products or services by a business relationship
  • Disengagement a last resort and considering impacts of disengagement

Responsible Supply Chains in the Textile and Garment Sector

  • Principle-based due diligence guidance around 5-step framework
  • Due diligence guidance for salient risks in the sector

Example salient risks:

  • Forced and bonded labour
  • Child labour
  • Occupational health and safety
  • Excessive working hours
  • Chemical use and water contamination
  • Freedom of association and collective bargaining
  • Wages

CSR Initiatives Natural Resources Canada (NRCan)

CSR Research Initiative

  • Purpose: to measure progress on CSR reporting by Canadian mining companies
  • Methodology: based on analysis of public reports by companies to stock exchanges
  • Analyzed reports of 100 projects of Canadian mining working abroad

Exploration and Mining Toolkit for Aboriginal Communities

  • Exploration and Mining Guide for Aboriginal Communities adapted in Chile, Colombia, Guyana, Mexico, Mongolia and Peru
  • Trainer’s Manual
  • Information Bulletin on Aboriginal Participation in Mining
  • Fact Sheets on Partnership Agreements

Corporate Social Responsibility Checklist for Canadian Mining Companies Working Abroad

  • Provide companies with a tool to help prevent and mitigate potential environmental, social and ethical challenges they may encounter
  • Identify indicators and actions to allow companies to engage communities and address social risks at every step of the project cycle.

CSR e-Catalogue

  • Showcases examples of Canadian mining and exploration companies’ CSR activities both in Canada and abroad
  • Highlights voluntary work that Canadian mining companies are doing to maximize benefits from responsible resource development
  • Publicly available to communities, stakeholders, and companies
  • Approximately 1200 Canadian mining and exploration companies contacted and solicited for information on their CSR activities using the Canadian Mining Association database
  • Approximately 500 CSR practices received, categorized under 16 international and 12 domestic CSR themes

Extractive Sector Transparency Measures Act

  • Establishes reporting and transparency measures for the Canadian extractive sector
  • Came into force June 1, 2015
  • Broadly aligned with emerging international reporting requirements
  • Requires greater transparency in payments by extractive business to all levels of government both domestically and abroad

NRCan Information Products: https://www.nrcan.gc.ca/mining-materials/mining/corporate-social-responsibility/17281

Overview of Canada’s Enhanced CSR Strategy for the Extractive Sector

Doing Business the Canadian Way: A strategy to Advance CSR in Canada’s Extractive Sector Abroad – Announced in 2009, enhanced in 2014

  • Two international guidelines added (and flexibility to promote more):
    • UN Guiding Principles on Business and Human Rights
    • OECD Due Diligence Guidance on Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas
    • Strengthened CSR-related training and materials for officers at Canada’s missions abroad to bolster service excellence to the Canadian business community around the world
    • Link between company CSR performance and level of Trade Commissioners Service (TCS) services

Key Messages

  • Focus on company/community relations
    • Early, broad, and ongoing engagement
    • Identify and address issues before they escalate
    • No advocacy for poor CSR performers but we work with them for improvement

For more information, please visit:

www.csr.gc.ca
http://international.gc.ca/csr_counsellor